Onfolio Holdings Inc. Completes DDS Rank Acquisition
Onfolio Holdings (Nasdaq: ONFO, ONFOW) has completed the acquisition of a majority interest in DDS Rank, a digital marketing service provider for dentists, through its Special Purpose Vehicle, Onfolio Agency SPV The deal, valued at $600,000, includes $200,000 in Series A Preferred Shares and a $200,000 secured promissory note due by May 31, 2026, along with $200,000 from the SPV for a 34% stake. DDS Rank generated $310,000 in revenue and $190,000 in unaudited EBITDA in 2023. Onfolio aims to double DDS Rank’s revenue and EBITDA within the next 1-2 fiscal quarters through enhanced marketing and operational improvements. Importantly, the acquisition was finalized without diluting Onfolio shareholders, and the funding structure facilitates additional acquisitions aimed at driving profitability.
- Acquired DDS Rank, a company with $310,000 revenue and $190,000 in unaudited EBITDA in 2023.
- Deal structured with non-dilutive funding; no new equity raised, protecting shareholder value.
- Onfolio retains 66% ownership in DDS Rank with potential to double revenue and EBITDA within 1-2 fiscal quarters.
- Acquisition aligned with a clear path to profitability without additional equity capital.
- Secured promissory note of $200,000 due by May 31, 2026, adds to Onfolio's liabilities.
Insights
The acquisition of DDS Rank by Onfolio Holdings Inc. presents several noteworthy financial implications. Firstly, DDS Rank's $310,000 in revenue and $190,000 in EBITDA for 2023 indicate a fairly high EBITDA margin of
From a deal structure standpoint, Onfolio's strategic use of its Special Purpose Vehicle (SPV) to secure funding without diluting shareholders is particularly insightful. The use of $200,000 of Series A Preferred Shares and a $200,000 secured promissory note ensures that common shareholders are protected from dilution, while still facilitating the acquisition. Additionally, the SPV's $200,000 investment for 34% of DDS Rank, leaving Onfolio with a 66% stake, is a balanced approach to financial leverage and risk management.
Operational improvements and increased marketing efforts are pivotal next steps. If executed well, they could significantly enhance DDS Rank's financial metrics. However, the reliance on non-dilutive funding means that Onfolio must carefully manage cash flow to meet promissory notes and dividend obligations on preferred shares.
Overall, the move indicates prudent financial engineering and a clear path to enhanced profitability, though execution risk remains.
The acquisition of DDS Rank can be analyzed from a market perspective as well. DDS Rank operates in the digital marketing space, focusing specifically on dental services. This niche market is growing as dental practices increasingly recognize the importance of digital presence. Therefore, there is significant growth potential for DDS Rank's services, especially in SEO, paid advertising and web design.
Onfolio's strategy to increase DDS Rank's revenue and EBITDA through increased marketing efforts is sound. Digital marketing remains a high-demand service and targeted efforts in this sector can yield substantial returns. Considering that DDS Rank already has a strong EBITDA margin, the potential for growth is considerable if Onfolio can leverage its marketing capabilities.
However, the challenge will be to distinguish DDS Rank in a competitive market where many players offer similar services. Onfolio's ability to innovate and maintain a high quality of service will be critical in achieving and sustaining growth targets.
The emphasis on non-dilutive funding to finance this acquisition also speaks to a savvy understanding of market dynamics and investor expectations, maintaining shareholder value while pursuing growth opportunities.
From a technological viewpoint, the acquisition of DDS Rank by Onfolio Holdings Inc. offers interesting insights. DDS Rank's focus on digital marketing services, including SEO, paid advertising and web design, aligns well with current trends where businesses are increasingly shifting to digital platforms.
SEO, or search engine optimization, is a critical service for visibility in the crowded digital space. Effective SEO can significantly enhance a dental practice's online presence and attract more clients. Understanding and staying updated with search engine algorithms is essential. Similarly, paid advertising requires strategic placement and timing to maximize ROI. Lastly, web design is the foundation of a digital marketing strategy. A well-designed website can improve user experience, leading to increased client engagement and conversion rates.
Onfolio's plan to double DDS Rank's revenue and EBITDA through technological and operational improvements suggests that they will likely invest in advanced tools and platforms to enhance service quality. The use of AI and machine learning for predictive analytics, personalized marketing and automated customer service could be potential areas for investment that would drive DDS Rank's growth.
By focusing on these technological advancements, Onfolio can position DDS Rank as a leader in the dental digital marketing niche, setting it apart from competitors.
WILMINGTON, Del., June 24, 2024 (GLOBE NEWSWIRE) -- Onfolio Holdings Inc. (Nasdaq: ONFO, ONFOW) (the "Company" or "Onfolio"), a company that acquires and manages a diversified portfolio of online businesses, today announced that it has successfully completed the previously disclosed transaction to acquire the majority interest in the assets of SEO Marketing Inc. doing business as "DDS Rank."
The acquisition was made possible with the assistance of Onfolio's Special Purpose Vehicle "Onfolio Agency SPV LLC," which is taking a minority interest in the business.
DDS Rank provides dentists with digital marketing services including search-engine optimization, paid advertising, and web design. During 2023, DDS Rank generated approximately
Onfolio believes that within the next 1 or 2 fiscal quarters, it can double the revenue and EBITDA of DDS Rank through increased marketing efforts and operational improvements.
"DDS Rank was an obvious acquisition for us. While it is much smaller than our next anticipated acquisition and other acquisition candidates in our pipeline, it has very significant untapped potential," commented Onfolio CEO Dominic Wells. "We believe we can increase annualized revenue and profits in the next few months.”
On the deal structure, Wells added, "We're completing this acquisition without investing any cash or common shares from Onfolio Holdings.
The purchase price is
The Series A Preferred Shares and secured promissory notes issued by Onfolio pay dividends and interest and are not convertible into Onfolio common shares.
"We have negotiated several acquisitions with structures similar to the DDS Rank transaction and have enough capital to close because of our special purpose vehicle non-dilutive funding," said Dom Wells.
"We now have a clear path and timeline to profitability, without the need for raising any additional equity capital," concluded Wells.
About DDS Rank
DDS Rank helps dentists increase their website traffic through search engine optimization and paid advertising. Approximately
About Onfolio Holdings
Onfolio acquires and manages a diversified portfolio of online businesses. Onfolio acquires business that meet its investment criteria, being that such businesses operate in sectors with long-term growth opportunities, have positive and stable cash flows, face minimal threats of technological or competitive obsolescence and can be managed by our existing team or have strong management teams largely in place. The Company excels at finding acquisition opportunities where the seller has not fully optimized their business, and Onfolio's experience and skillset allows it to add increased value to these existing businesses. Visit www.onfolio.com for more information.
Safe Harbor Statement
The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words "may," "will," "should," "plans," "explores," "expects," "anticipates," "continues," "estimates," "projects," "intends," and similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, but are not limited to, general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, delays due to issues with outsourced service providers, those events and factors described by us under the caption "Risk Factors" included in our SEC filings and other risks to which our Company is subject, and various other factors beyond the Company's control.
Investor Contact
investors@onfolio.com
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